As French residents, French income tax will apply to worldwide income, subject to the terms of any relevant double tax treaty (DTT). French income tax is assessed on a ‘foyer fiscal’ basis, which means that married couples file joint tax returns and would also include the income of any dependents.
The French tax year is the calendar year. Each source of income is assessed separately, then added together to reach the overall gross taxable income, which may be subject to various deductions (such as the deductible proportion of the prior year’s CSG liability (if any) to reach the net taxable income for the year.
This net figure is then divided by your number of family shares (quotient familial) to reach the figure that is subject to the barème (French tax scale rates). The number of family shares depends on your ‘foyer fiscal’, i.e. your marital/PACS status and whether you have any dependants. The resulting tax liability is then multiplied by your quotient familial to reach your overall gross tax burden. The barème d’imposition des revenues for the 2017 tax declaration (based on 2016 income) is shown below, and is updated annually in the French finance law:
|Band of Income (€)||Rate|
|0 to 9,710||0.00%|
|9,710 to 26,818||14%|
|26,818 to 71,898||30%|
|71,898 to 152,260||41%|
In some cases, the application of the quotient familial may be limited. In short, a comparison is made between (i) the gross tax liability using the normal quotient familial, and (ii) the gross tax liability calculated using a quotient familial of 2 shares for a married couple and 1 share for a single person, which is then reduced by a gross fixed deduction per 0.5 share that the taxpayer would have normally benefited from (as used to calculate part (i)). The higher of (i) and (ii) will be used as the gross tax liability.
There’s a handy income tax simulator online (in French) with the option to calculate a simplified version or a complete version.
There are various reductions to the gross income tax liability that may be available (such as the tax credit available for the employment of certain home help, or for certain renovation work) to reach the net tax payable.
French residents have to file annual returns to their local income tax office, and the returns should reach the authorities no later than midnight on the May deadline, which has yet to be confirmed by the authorities (it was Wednesday May 18 in 2016) . This deadline is extended if you choose to file your return via the Internet with different dates according to your department.
The late filing of a return gives rise to penalties of 10%, 40% or 80% of the eventual tax due, depending on the delay, how many times, if any, the authorities have had to chase for the return and whether the taxpayer’s “good faith” can be questioned. In addition, there is an interest charge of 0.40% of the tax due per late month.
For your first year of charge, your French income tax demand will be sent out and payable in late August/early September. However, in following years, you will pay your French income tax liability in instalments. The first two instalments are due in February and May and are both calculated as 1/3 of the prior year’s total French income tax charge. The final instalment is due in late August/early September and is calculated as your overall tax charge for the year in question (and based on the French income tax return that you would have filed in the interim) less the two instalments already paid. It is possible to opt to pay monthly by direct debit.
The late payment of a demand will give rise to interest at 0.4% of the tax due per late month. However, depending on the delay, a penalty of 10% may also be applied, and in such circumstances, no interest is charged.
•With thanks to taxation experts La Belle Vie, in Guernsey for the original source. Last updated February 2017.
It is now obligatory for those whose net declarable income in 2015 was greater than €28,000, to make their tax declarations online – unless you are without internet access. The penalty for not doing so is a €15 fine following the second offence.
The information in this article is provided for informational purposes and does not constitute legal, professional or financial advice. We encourage you seek the advice of a relevant professional before acting on any of this information. Any hyperlinks to other resources on the Internet are provided as sources and assistance and are not intended to state or imply that FrenchEntrée, endorses the information contained in the links.